If you have lived or worked in more than one state in the last year, your annual tax returns will likely be impacted. Each state has its own regulations to take into account in your tax preparation, as well as its own unique paperwork. Here are a few instances you might need to file multiple returns.

3 Reasons for Multistate Tax Preparation

1. You Moved States During the Tax Year

If you have moved to a new state permanently over the year, you will have to file in both your old and new state. This requires two part-year tax returns—one going to your former and one to your new state. Your income and deductions are then divided between the two states.

2. You Live & Work in Two Different States

An alternative scenario could be that you live in one state and commute to another one for work. In this case, you need a resident tax return for your home state and a nonresident tax return for the one you work in. You can usually get a tax credit on your resident return for whatever you pay out of state. Some states have reciprocal agreements that allow residents to work in neighboring states tax-free—you just have to file an exemption form with your employer.

3. You Are Self-Employed & Work Across State Lines

Say you are a self-employed plumber located in Des Moines, IA, but you also serve clients in towns in Nebraska or Missouri. Since your business technically crosses state lines, you will likely have to file returns and pay taxes in each state. This can get complicated since each state has its own laws, but a local tax preparation professional with experience in cross-border work can help.

For assistance with your tax preparation in Chariton, IA, and the surrounding areas, look to Shelton Law Firm. Since 1967, their attorneys have established a reputation for knowledgeable and thorough guidance. They don’t hesitate to take on complicated cases, accompanying their clients through difficult legal processes every step of the way. Visit their website to review their practice areas, and call (641) 774-5956 to schedule a meeting with a trustworthy lawyer today.